Walmart backed Flipkart has decided to carry forward the legacy of its parent, and has acquired Walmart’s entire business in India, ahead of the launch of its wholesale marketplace- Flipkart Wholesale. The company is planning to partner up with mom and pop stores throughout the country, acting as an intermediary between these small stores and potential customers. Jiomart seems to have accelerated a lot of this stuff.
The deal would also result in Walmart’s entire India retail business getting consolidated under the Flipkart group. Flipkart said its wholesale unit will acquire Walmart India’s cash-and-carry business that owns the Best Price brand
However, the market is saturated with such marketplaces, with Udaan and JioMart having an edge on the e-commerce company. Thus, to ensure that it stands a fighting chance, Flipkart Wholesale has decided to acquire 100% of Walmart’s business in India, which operates the Best Price cash-and-carry business, boasting 28 stores under its belt spanned across the country’s geography. This will help give Flipkart Wholesale a head start, and gain access to the 1.5 million subscribers of the chain.
Moreover, the company plans on utilizing Flipkart’s strong homegrown technology capabilities, and the Group’s vast supply chain infrastructure to reach kiranas and MSMEs across the country, which will become the backbone of Flipkart Wholesale’s entire business model.
The deal as such looks a bit strange, considering Walmart had just recently led a $1.2Bn round into Flipkart. Whether the two deals are related, isn’t officially known, but the timing is peculiarly intriguing.
“The Flipkart Group, India’s homegrown e-commerce group, today announced the launch of Flipkart Wholesale, a new digital marketplace that will help transform the kirana retail ecosystem in India by leveraging cutting-edge and locally developed technology. As part of this launch, the Group also announced the acquisition of 100% interest in Wal-Mart India Private Limited, which operates the Best Price cash-and-carry business, to leverage the strong wholesale capabilities of the company and enable growth and prosperity for kiranas and MSMEs,” the company said in a blog post.
The company plans on providing small businesses, such as the Kirana stores and MSMEs, “a wide selection at significant value, powered by technology to make their lives easier.” Flipkart realises that these stores form an essential part of India’s retail business, and will provide one-stop access to an extensive selection of products with
attractive schemes and incentives with their help. Moreover, it will power these small businesses with the help of easy credit options and opportunities for new income generation through various Flipkart initiatives.
Judith McKenna, President and Chief Executive Officer, Walmart International, confirmed, “Flipkart Wholesale will launch its operations in August 2020 and will pilot services for the grocery and fashion categories. It will be headed by Adarsh Menon, a veteran at Flipkart. Sameer Aggarwal, Chief Executive Officer at Walmart India, will remain with the company to ensure a smooth transition, after which time he will move to another role within Walmart.”
However, the journey ahead isn’t going to be easy, as a lot of established players have already developed their footprint in the market, competing with whom can be a strenuous task. Lightspeed-backed Udaan has emerged as the biggest player in the market, with a presence in 600 cities across the nation.
That is not all, as World’s 5th richest man Mukes Ambani’s JioMart recently expanded its catalogue to deliver just about everything on its platform, initiating an expansion into over 200 cities and town across India. Moreover, the company has backing from Facebook, which plans on increasing its presence in the country’s retail business, and has invested $5.7 billion in Mukesh Ambani’s venture to that end.